Mumbai-based Avendus Capital Pvt has attracted money from domestic insurers for a private equity fundraising for the first time as demand surges for private assets.
The investment bank, which is backed by KKR & Co, is raising as much as Rs 3,000 crore ($343 million) for its Future Leaders Fund III. It held a first close at Rs 850 crore in January and is planning to close by June, said Ritesh Chandra, managing partner for private equity strategy.
“High-net-worth money is a good broad-based tool, but it can never provide you the kind of scale that an institutional investor can,” Chandra said in an interview. Domestic institutions are underinvested in private assets, but they’re opening up to the prospect as returns come through, he said.
For Avendus, and the wider industry, capital is coming from a broader range of investors, not just wealthy individuals and family offices.
If Avendus meets its target for its latest fund, the portfolio will be around two thirds larger than its one that raised Rs 1,800 core in 2022.
Investors in previous funds were mostly high-net-worth individuals and wealthy professionals who could write checks for a minimum of Rs 1 crore, according to Chandra. About 39 per cent of existing investors committed capital to the new fund, and most committed up to 40 per cent more, he said. The larger value checks were from family offices, Chandra said.
“You will see an institutionalization of capital,” he said. “We have a large wealth franchise and it’s important that we maintain that pool of capital.”
The latest fund, which typically takes minority stakes in companies, is targeting late-stage businesses in technology, financial services, consumption, health care and opportunistic investments in manufacturing, Chandra said.
The article originally appeared on Business Standard.
